Steady population growth, high per capita income, increased health awareness and the rising prevalence of lifestyle diseases — taken together, it’s not hard to see why the demand for quality health care is growing across the UAE.
According to a study conducted by industry research firm RNCOS, the UAE health-care industry is expected to grow at the rate of more than 16 per cent during 2011-14, and will be worth about $14.6 billion by 2014. The country has witnessed tremendous increase in the demand for health-care services, which also indicates high health-care spending.
Sensing opportunities for growth, a number of major international health-care players have entered the market in the past few years, raising the standard of care offered in the country. The UAE government has also adopted a strategy of encouraging top global and regional health-care service providers to establish facilities in the country. These developments have not only helped UAE residents, who have traditionally travelled abroad for medical care to avail of treatments in the country, but also created a hub for regional medical tourists.
David Hadley, CEO of Mediclinic Middle East, which manages Welcare, City Hospital and a number of clinics, tells GN Focus, “A rapid increase in the population has resulted proportionately in an increase in demand for health-care facilities. This has attracted many competitors into the market, which is excellent for patients as the extra competition will certainly help to raise the quality of health-care services.”
A survey conducted by Deloitte Middle East on the UAE health-care sector found that the rising population is expected to remain the fundamental driver of demand for health-care goods and services in the years to come.
The UAE’s per capita health-care spending, ranked second highest among the GCC nations, is projected to rise at the rate of 5 per cent by 2014.
“The UAE’s ambition and the long-term strategy is to become a preferred destination for domestic patients and a hub for global medical tourists seeking high quality and cost-effective treatments,” Firas Eid, Consulting Partner at Deloitte in the Middle East said in a press statement. “To achieve this, the government is improving the country’s regulatory environment and capacity planning in addition to empowering and encouraging the development of public-private partnerships. At the same time, increased participation of branded private players is seen as a means to create competition and raise care standards,” he said.
Along with significant government budgetary allocation to the sector, mandatory insurance coverage in some emirates is also encouraging residents to seek treatment in the UAE. Patients’ confidence in services offered in the country is also getting stronger. Mariano Gonzalez, Managing Director of Moorfields Eye Hospital Dubai, points out that the majority of its 20,000 patients treated in the past five years are from the local Emirati community and expats. “This suggests strongly that there is a demand for high quality care provided locally as an option to travelling abroad for treatment. It is, however, difficult to say whether the historical trend [of travelling] will be reversed but there is no doubt that the reputation and performance of the private health-care sector in the UAE is improving and it should help encourage more UAE residents to seek treatment in the country,” he says.
With the addition of many new services in private and government hospitals, the nation’s medical capabilities are moving from the primary to the secondary and tertiary care levels. Patients also now have more confidence in treatments offered by UAE doctors, says Thomas Murray, Chief Executive Officer, American Hospital Dubai. “The confidence is reinforced when physicians have international qualifications, are certified by major Western medical boards and also speak Arabic,” he adds. As the first private hospital in Dubai, the hospital campus has grown considerably from 159 to 384 beds since its launch in 1996.
Growth and challenges
The Saudi German Hospitals Group-Dubai, which began operations last year with a capacity of 315 beds, will add 215 more beds in 2013. It also plans to start a tertiary hospital in Ajman in 2013. Mediclinic Middle East will commence the construction of a Dh200 million expansion project within Dubai Healthcare City (DHCC). This will house a new oncology unit, complete with PET CT and a linear accelerator, an out-patient dialysis unit, an expanded reference laboratory, a day-care unit (theatre and ward), a rehabilitation centre and corporate offices.
Al Zahra Hospital, meanwhile, will open a 187-bed hospital in New Dubai early this year. “The government’s strategy in the UAE is to build a world-class health-care system and this has clearly set the tone for the rapid development and growth of the health-care sector in the UAE,” says Prosenjit Bhattacharya, CFO of Al Zahra Private Hospital, Dubai.
Accredited by the Joint Commission International (JCI) and Swiss Leading Hospitals, RAK Hospital launched several initiatives last year, including a fully equipped neurosurgery and spine centre, which specialises in handling minimally invasive procedures, a 12-bed day-care centre, a department focused on aesthetic, plastic and reconstructive surgery and a spa. When it comes to cost of treatments, though there is not much difference between the UAE and countries in Europe, the cost in the UAE, however, remains high when compared with India or South East Asia, where Emiratis and expatriates often travel for treatments.
“It is important to note that health-care spend is linked to the per capita GDP of a country,” says Hadley. “One of the biggest cost drivers in the hospital industry is salaries, and obviously salaries need to be reflective of the environment we live in. While the percentage of spend may be similar across countries, a lower GDP per capita will thus certainly have a lower net health-care spend per capita. As the UAE is a very high-income country, the health-care costs are proportionately higher,” Hadley adds.
While the proximity to well-developed medical destinations, such as India and South East Asia, poses serious challenge to the UAE health-care sector, the biggest concern for the industry lies in the shortage of experienced health-care professionals. The high turnover rate of skilled professionals also makes the matters worse. “Lack of professional development, no continued medical education programmes for health-care professionals, little focus on research and development, lack of teaching in hospitals and expensive pharmaceutical drugs all add to the challenges that the health-care sector is facing in the UAE,” says Bhattacharya.